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Unified Pricing Across Product Lines: Detail or Driver?

Unified Pricing Across Product Lines: Detail or Driver?. Erik Larson Director of Product Management and Marketing Macromedia. Macromedia Target Markets. Designers & Developers. Business Users. Consumers. 5 million Creative Pros. 8 million

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Unified Pricing Across Product Lines: Detail or Driver?

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  1. Unified Pricing Across Product Lines:Detail or Driver? Erik Larson Director of Product Management and Marketing Macromedia

  2. Macromedia Target Markets Designers & Developers Business Users Consumers 5 million CreativePros 8 million Pro Developers 68 million BusinessCommunicators 1 billion Mobile andDevice Users Graphic Designers(2.7m) Web Developers(1.8m) Multimedia (0.5m) 3G Coding(4.7m) Scripters (1.3m) G4 (2.3m) Presenters & Publishers (35.3m) Meeting & Training Participants (30m) Subject Matter Experts (2.4m) Handhelds (19m WW) Cell Phones(1b WW) *WW seat estimates Sources: Gartner, IDC, MetaFacts, Macromedia Market Research

  3. Macromedia Pricing Models Offerings • Tools, Suites, Servers, Installed Solutions, Hosted Solutions Models • Per PC, Per CPU, Per Named User, Per Concurrent User, Capacity • Perpetual, Subscription, Maintenance • 12, 24, 36 months Programs • Commercial, Education, Government, Non-Profit, Japan, Europe Channels • Direct, Disti-Reseller, Reseller, Online-Store

  4. Pricing Drivers • Customer Desire • Business Model • Business Strategy

  5. PLEASE RANK THE FOLLOWING SOFTWARE PRICING MODELS IN ORDER OF ATTRACTIVENESS. Allows me to pay for what I use Allows me to pay for the value I derive Evenly distributes costs over time Includes large up-front fee plus recurring fee 0 200 400 600 800 1000 1200 1400 Source: IDC, April 2003, N=280, Quicklook Licensing Study, April 2003

  6. Consumer $0 $200 Pro Tool $200 $2,000 Dev Server $1,000 $20,000 Departmental $15,000 $50,000 Enterprise $50,000 Unify Pricing and Business Model Consumer Resellers Value Add Wks to Mos Mos to Years

  7. Death to Line Extensions – Consolidate and Dominate Dreamweaver $299 + UltraDev $599 = ??? • Business Performance – Strong • Competitive Landscape – On the Verge • Business Strategy – Dominate • Decision – Results

  8. Death to Line Extensions – Consolidate and Dominate Dreamweaver $299 + UltraDev $599 = ??? • Business Performance – Strong • Competitive Landscape – On the Verge • Business Strategy – Dominate • Decision – Dreamweaver MX $399 Results

  9. Long Live Line Extensions – Go Pro When You’re Already There Flash $399 = Flash $399 + ??? • Business Performance – Dominant and Steady • Competitive Landscape – Empty • Business Strategy – Extend and Grow • Decision – Results

  10. Long Live Line Extensions – Go Pro When You’re Already There Flash $399 = Flash $399 + ??? • Business Performance – Dominant and Steady • Competitive Landscape – Empty • Business Strategy – Extend and Grow • Decision – Flash Professional $699 Results

  11. Where Bundles Work – Suites to Raise Share of Wallet 4 Separate Products for $1,596 = ??? • Business Performance – Strong • Competitive Landscape – On the Verge • Business Strategy – Dominate • Decision – Results

  12. Where Bundles Work – Suites to Raise Share of Wallet 4 Separate Products for $1,596 = ??? • Business Performance – Strong • Competitive Landscape – On the Verge • Business Strategy – Dominate • Decision – Studio MX $799 Results

  13. Where Bundles Don’t – Tag-Alongs Don’t Grow Share Studio + Contribute = ??? • Business Performance – New Product • Competitive Landscape – Established and Crowded • Business Strategy – Enter and Grow • Decision – Results

  14. Where Bundles Don’t – Tag-Alongs Don’t Grow Share Studio + Contribute = ??? • Business Performance – New Product • Competitive Landscape – Established and Crowded • Business Strategy – Enter and Grow • Decision – Studio Plus with No Price Increase Results

  15. Buy Low – Going Low to Enter and Grow Contribute v1.0 = ??? • Business Performance – New Product • Competitive Landscape – Established and Crowded Per User Discrepancy: Interwoven for $250K or FrontPage for $189 • Business Strategy – Enter and Grow • Decision – Results

  16. Contribute Pricing Data (Per User)

  17. Buy Low – Going Low to Enter and Grow Contribute v1.0 = ??? • Business Performance – New Product • Competitive Landscape – Established and Crowded • Business Strategy – Enter and Grow • Decision – $99 per seat Results

  18. Consumer $0 $200 Pro Tool $200 $2,000 Dev Server $1,000 $20,000 Departmental $15,000 $50,000 Enterprise $50,000 Unify Pricing and Business Model Consumer Resellers Value Add Wks to Mos Mos to Years

  19. Sell High – Pricing to Enter and Expand Contribute + Enterprise = ??? • Business Performance – Existing Product, New Market • Competitive Landscape – Established and Crowded • Per User Discrepancy: Interwoven for $25K or FrontPage for $189 • Business Strategy – Enter and Grow • Decision – Web Publishing System • $229 per seat • $2,499 starter pack • $50K + site license Results

  20. Sell High – Pricing to Enter and Expand Contribute + Enterprise = ??? • Business Performance – Existing Product, New Market • Competitive Landscape – Established and Crowded • Per User Discrepancy: Interwoven for $25K or FrontPage for $189 • Business Strategy – Enter and Grow • Decision – Web Publishing System • $229 per seat • $2,499 starter pack • $50K + site license Results

  21. Consumer $0 $200 Pro Tool $200 $2,000 Dev Server $1,000 $20,000 Departmental $15,000 $50,000 Enterprise $50,000 Unify Pricing and Business Model Consumer Resellers Value Add Wks to Mos Mos to Years

  22. Summary • Price to Customer Desire • Price to Business Model • Price to Business Strategy

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